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IN THE HIGH COURT OF JUDICATURE AT BOMBAY


BENCH AT AURANGABAD
FIRST APPEAL NO.661 OF 2009
[with CA No.2659/09 and CA No.3901/09]
New India Assurance Co., Ltd., Jalna
Through Mr.Vishwas B. Giakwad
Sr.Div. Manager, Aurangabad.
APPELLANTS
VERSUS
Madhukar Namdeo Jagtap
R/o Dawalwadi Tq. Badnapur
Dist. Jalna.
RESPONDENTS.
***
Shri Dhananjay Deshpande, advocate for appellant.
Shri Kailash Jadhav for respondent No.2 & 3
Shri P.K.Rakhunde, advocate holding for
Shri S.B.Bhapkar, advocate for respondent no.1.
***
Coram : K.U.Chandiwal, J.
Date:
30th June 2009.
P.C.:
01-

Heard the counsel for the respective parties. The insurance

company feels aggrieved by the judgment dated 21st Nov., 2008 passed by
the learned Commissioner for Workmen Compensation and Judge, Labour
Court, Jalna in WC No.12/2007 whereby the claim is allowed saddling the

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responsibility to the appellant / insurance company.

02-

According to the counsel for the insurance company, the

learned judge failed to apportion the liability between the appellant and the
insured as there is illegality to hold that the appellant is jointly and severally
liable to pay the entire amount of compensation. It was canvassed, on the
date of accident dated 16/02/2006, the vehicle was owned by respondent no.3
who has insured said vehicle for the period commencing from 31/08/2006 to
01/08/2007. Admittedly according to the counsel on the date of accident the
respondent no.2 herein was not the owner of the vehicle.

The counsel for the insurance company has taken recourse to


the judgment of Honble Supreme Court in the matter of Rikhi Ram and
another Vs. Sukhrania & Others, 2003 [2] TAC 22 [SC]. In para 7 of the said
judgment, the Honble Lordships have observed as under;
7. For the aforesaid reasons, we hold that whenever a
vehicle which is covered by the insurance policy is
transferred to a transferee, the liability of insurer does
not cease so far as the third party / victim s concerned,
even if the owner or purchaser does not give any
intimation as required under the provisions of the Act.
03-

The counsel for the insurance company would urge, while

reading para no.7 this Court also consider the observations of the Apex Court
in para no.8 which is as under;

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8.For the aforesaid reasons, the appeal is allowed. We


set aside the order and judgment under challenge, It is
hereby directed that the insurer shall pay compensation
to the victims within eight weeks along with interest @
11% p.a., from the date of incident and it will be open to
the insurer to recover the said amount either from the
insured or from the transferee of the vehicle. However,
there shall be no order as to the costs.
And according to the counsel, the insurance company, even if it
deposits the amount, since there is breach of terms of policy particularly in
the light of Sec.157 of the M.V. Act, the amount should be allowed to be
recovered either from the insured or from the transferee of the vehicles.

04-

The facts involving to the accident in the case relating to an

employee, will indicate that on the date of accident, the vehicle was duly
insured. It was owned by respondent no.3. The transfer in favour of
respondent no.2 will not change the liability of the insurance company so far
as the claimants are concerned, since the claimants are not party to the
contract inter-se between respondent no.3 and the insurance company.
Whatever was the risk and liability it was to be shared by the insurance
company, as there was regular premium paid by the insured, as a part of risk
carrying by the insurance company.

05-

The counsel for the claimant has relied on the judment in the

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matter of G.Govindan Vs. New India Assurance Co., Ltd., & Ors. I[1999]
ACC 483 [SC} wherein the Lordships have observed; whether insurance
policy lapses and consequently liability of insurer ceases when insured
vehicle was transferred and no application / intimation as prescribed under
Sec.103-A of 1939 Act was made / given.
Their Lordships answered the query in the negative and
allowed the Appeal. This is in reference to the conflicting view of full bench
judgment from Karnataka High Court and Andhra Pradesh High Court. The
Judgment in the matter of G.Govindan Vs. New India Assurance Co., Ltd., &
Ors [supra] is also referred and approved by the subsequent judgment as can
be seen in para no.3 in the judgment of

Rikhi Ram and another Vs.

Sukhrania & Others [supra]. In the situation, since the appeal is only on the
above point, I hold that the insurance company is liable to answer claim of
the award of the learned Commissioner for Workmen Compensation, The
appeal sans merit, it is dismissed. No costs.

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The counsel for the claimant is at liberty to apply to the

learned Judge for withdrawl of the amount. The Civil applications disposed
of.

[K.U.CHANDIWAL]
JUDGE
/mda/0609/fa661.09